Research › Search › Judgment

Madhya Pradesh High Court · body

2009 DIGILAW 1118 (MP)

Gandhi Cotton v. Muruganathan Mills Limited

2009-09-11

N.K.MODY

body2009
JUDGMENT N.K. Mody, J. 1. Being aggrieved by the judgment dated 11.9.2001 passed by JMFC, Indore in criminal case No. 2419/1999 whereby the complaint filed by the appellant under Section 138 of Negotiable Instruments Act (which shall be referred hereinafter as "NI Act") on 10.7.1996 alleging that on 8.11.1995 respondent purchased goods valuing Rs. 5,12,912/- and issued cheque of the same amount of Indian Bank. It was alleged that cheque was presented by the appellant but the same was returned with an endorsement of the Bank to the effect "insufficient funds". It was alleged that after receipt of information from the Bank on 28.5.1996 notice was issued by the appellant to the respondent for payment but inspite of that the amount was not paid. It was alleged that respondent has committed an offence punishable under Section 138 of N.I. Act hence, respondent be convicted. After taking cognizance of the offence and after notice to the respondent and also after framing of charge and recording of evidence respondent was acquitted against which the present appeal has been filed. 2. Learned Counsel for the appellant argued at length and submits that the learned Court below committed error in acquitting the respondent. It is submitted that in the facts and circumstances of the Case, learned Court below committed error in dismissing the complaint filed by the appellant and in acquitting the respondent for an offence punishable under Section 138 of NI Act. 3. Learned Counsel for the respondent submits that no illegality has been committed by learned Trial Court in acquitting the respondent. Learned Counsel placed reliance on a decision in the matter of B. Adarsh Rao v. Tamil Nadu Electricals (2000) BC 176 : 1999 B. J. 467 wherein, in a case where the complaint was filed on the basis of proprietary concern, the question arose whether Manager can file the complaint authorization in favour of Manager produced at time of evidence, the Hon'ble Madras High Court held that as cheque in dispute was issued in the name of proprietary concern only owner of the concern could maintain the complaint. It was further held that proprietary concern cannot be equated with a firm where a partner can act for the firm. It was also held that authorization in favour of Manager not presented when cognizance of the complaint was taken, hence complaint was not tenable. It was further held that proprietary concern cannot be equated with a firm where a partner can act for the firm. It was also held that authorization in favour of Manager not presented when cognizance of the complaint was taken, hence complaint was not tenable. Learned Counsel further submits that the appeal filed by the appellant has no merits, hence the same be dismissed. 4. From perusal of record, it appears that to prove the case appellant has filed the document Ex. P/l which is a cheque issued in favour of the appellant by the respondent which has been signed by the Director. Ex. P/2 is the letter issued by the concerned Bank whereby the cheque was returned. Ex. P/3 is the notice. Ex. P/4 is postal receipt and Ex. P/5 is the acknowledgement. Ex. P/6 is the power of attorney whereby Rajendra Kumar Gandhi, Proprietor of the appellant/firm has authorized Rupesh Kumar Gandhi as power of attorney. Apart from this, the appellant has examined Rupesh Kumar Gandhi as PW/1, M.K. Zindani as PW/2 and Rajendra Kumar Gandhi as PW/3 while no evidence has been adduced by the respondent except the statement given by the respondent under Section 313 of Cr.P.C. 5. From perusal of judgment passed by learned Court below, it is evident that the learned Court below has dismissed the complaint filed by the appellant on the following ground: (i) The complaint has been filed by M/s. Gandhi Cotton through Manager Rupesh Kumar Gandhi. In the complaint it is nowhere stated that the Manager Rupesh Kumar Gandhi was authorized by Rajendra Gandhi, proprietor of the firm to file the complaint. (ii) Power of attorney Ex. P/6 appears to have been prepared in back date which was not in existence at the time of filing of the complaint. Thus, the complaint filed suffers with technical defect. (iii) No document has been filed to demonstrate that the respondent/Muruganathan Swami is the Manager or not of M/s. Muruganathan Mills Limited. (iv) Cheque Ex. P/1 has not been signed in presence of Rupesh Kumar Gandhi or Rajendra Gandhi, therefore, it can not be said that the cheque was signed by the respondent. (v) No documentary evidence has been produced to demonstrate that the goods were sent by the appellant/Firm to M/s. Muruganathan Mills Limited. (vi) The above name Company M/s. Muruganathan Mills Limited has not been impleaded as accused. (v) No documentary evidence has been produced to demonstrate that the goods were sent by the appellant/Firm to M/s. Muruganathan Mills Limited. (vi) The above name Company M/s. Muruganathan Mills Limited has not been impleaded as accused. (vii) Appellant has examined M.K. Jindhani as PW/3 but he has not stated that M/s. Gandhi Cotton is having account in their Bank or not. The memo which was sent to the concerned Bank along with the cheque has not been filed. It cannot be said that there was no sufficient balance in the account of respondent on or before 5.6.1996. (viii) The complaint has been filed on 10.7.1996. Ex. P/2 is the letter issued by State Bank of Indore whereby the appellant/Firm has been informed that the cheque has been returned for the reason of 'insufficient funds'. Appellant has not examined any witness of the Bank where the respondent was having the Bank account. (ix) No evidence has been adduced by the appellant to show that the cheque was deposited in which account. (x) Ex. P/6 is the power of attorney which has been exhibited in favour of Rupesh Kumar Gandhi. The power of attorney has been exhibited on stamp paper which has been purchased on 31.3.1996 while the power of attorney has been executed on 6.10.1996. 6. In the matter of Anil Kumar Haritwal v. Sant Prakash Gupta (2002) BC 113 : 2001 (2) MPLJ 488 this Court has held that power of attorney holder is competent to make complaint in writing for taking cognizance of offence under Section 138. In the matter of M.M.T.C. Ltd. v. Medchl Chemicals and Pharma, (P) Ltd. AIR 2002 SC 182 : (2002) BC 280 (SC) : IV (2001) CCR 316 (SC); wherein the complaint was lodged in the name and on behalf of Company who was the payee of the cheque and the same was filed by Manager or Deputy General Manager who was not authorized by Board of Directors to sign and file complaint on behalf of the Company, the Hon'ble Apex Court held that it cannot be a ground for quashing complaint, since defect is curable. 7. In the present case the complaint was filed on 10.7.1996 by the appellant which is a proprietary concern through its Manager. It is true that in the complaint it is not mentioned that Manager is authorized to file the complaint. 7. In the present case the complaint was filed on 10.7.1996 by the appellant which is a proprietary concern through its Manager. It is true that in the complaint it is not mentioned that Manager is authorized to file the complaint. However, the power of attorney Ex. P/6 has been executed by Rajendra Gandhi, Proprietor of the appellant/concern in favour of Rupesh Kumar Gandhi which is on a stamp paper dated 31.3.1996 and was duly notarized. Only on the basis of that the stamp paper is dated 31.3.1996 and the document Ex. P/6 was executed on 6.10.1996, it cannot be said that the document Ex. P/6 is anti-dated. It is not the case of the respondent that Rupesh Kumar Gandhi was not authorized to file the complaint. 8. So far as not impleading the Company on whose behalf the cheque was issued is concerned, it is true that the Company also ought to have been impleaded as accused but if the Company has not been impleaded as accused, then, it cannot be said that on this ground the complaint filed against the respondent is not maintainable. 9. In the present appeal the complaint has been filed against the respondent who is none else but the person who has signed the cheque Ex. P/1, as Director of the Company. The important fact is that Muruganathan Swami appeared before the learned Court below at the time of recording of the statement under Section 313 of Cr.P.C. and has stated that he is the Managing Director of the Company. 10. So far as the dismissal of the complaint on the ground that the cheque Ex. P/l was not signed in presence of Rupesh Kumar Gandhi, Manager of the appellant/Firm or Rajendra Gandhi, Proprietor of the Firm is concerned, neither it was the case of the respondent nor the respondent has denied his signature. Similarly, the concerned Bank has also not returned the cheque Ex. P/l on the ground that it does not bear the signature of the respondent. On the contrary the cheque has been returned on the ground of "insufficient funds". This itself implies that the cheque Ex. P/l was signed by the respondent. 11. So far as insufficiency of the funds at the relevant time is concerned, in the document Ex. P/2, it is specifically mentioned. On the contrary the cheque has been returned on the ground of "insufficient funds". This itself implies that the cheque Ex. P/l was signed by the respondent. 11. So far as insufficiency of the funds at the relevant time is concerned, in the document Ex. P/2, it is specifically mentioned. It is true that the memorandum which was issued by the Indian Bank of the respondent in favour of State Bank of Indore which was the Banker of the appellant is not on record. In the letter Ex. P/2 it is not mentioned that the memorandum sent by the Indian Bank is enclosed. Thus, there is no mistake on the part of the appellant and there is no reason to disbelieve the contents of Ex. P/2. Another ground taken by the learned Trial Court for dismissing the complaint was that the appellant has failed to call the record from the concerned Bank to prove that at the relevant time the respondent was not having the sufficient balance. 12. In view of the document Ex. P/2 there was no justification on the part of the learned Trial Court that the appellant failed to prove that the respondent was not having sufficient balance. There was sufficient evidence to establish that the respondent was not having sufficient funds for the payment of cheque amount Ex. P/l at the relevant time. On the contrary the burden was on the respondent to call the concerned Bank to prove that the respondent was having sufficient funds at the relevant time. 13. Lastly, the ground taken by the learned Trial Court for dismissing the complaint was that the appellant has failed to prove the existing liability of the respondent as the relevant document has not filed is concerned, Rupesh Kumar Gandhi the Manager of the appellant/Firm has stated at length in this regard on Oath. In the statement of the Manager and the Proprietor, it has come that appellant/Firm supplied the Cotton against which the cheque Ex. P/l was issued by the respondent. In his cross-examination he has admitted that appellant/Firm is maintaining the account and the amount of Rs. 50,000/- was paid by the respondent has been credited to the account of respondent and the balance amount was outstanding for which the cheque was issued. P/l was issued by the respondent. In his cross-examination he has admitted that appellant/Firm is maintaining the account and the amount of Rs. 50,000/- was paid by the respondent has been credited to the account of respondent and the balance amount was outstanding for which the cheque was issued. In view of the aforesaid statement the burden to prove that the cheque was not issued by the respondent for a debt or a liability was on the respondent as held by the Hon'ble Apex Court in the matter of K.N. Beena v. Muniyappan (2006) BC 287 (SC) : 2001(7) SCALE 331 . 14. In view of the aforesaid discussion, this Court is of the view that the learned Trial Court committed error in dismissing the complaint and acquitting the respondent. On the contrary by adducing sufficient evidence, it was proved that the appellant was the holder of cheque which was issued by the respondent against the subsisting liability. In the opinion of this Court the appellant has successfully proved that the cheque was issued by the respondent in favour of appellant for discharging his liability. Since the cheque was dishonoured on account of insufficient funds, this Court holds that the respondent has committed an offence which is punishable under Section 138 of N.I. Act. In view of this, the appeal filed by the appellant is allowed and the findings whereby the respondent was acquitted are set-aside. So far as sentence is concerned since the alleged cheque was of the year 1996 and the transaction between the parties was commercial in nature, the respondent is directed to pay double of the cheque amount. It is also made clear that in case of default in payment of the amount of compensation as stated above the respondent shall be liable for the jail sentence for a period of three months. 15. With the aforesaid observations, appeal stands disposed of. C.C. as per rules. Appeal disposed of.